For foreign buyers considering Phuket property, the question is not whether Thai law allows ownership through nominee structures. It does not. The question is whether enforcement will intensify, and what that means for existing deals and future purchases.
Thailand’s Deputy Prime Minister Anutin Charnvirakul has ordered a corruption investigation into Phuket officials over foreign nominee companies and land encroachment. The directive targets officials suspected of enabling illegal land ownership structures, a long-standing issue in Phuket where foreign buyers have historically used Thai nominees to circumvent ownership restrictions.
The investigation follows reports of officials facilitating arrangements that allow foreign nationals to control land through Thai citizens acting as nominal shareholders. These structures violate Thailand’s Foreign Business Act and Land Code, which generally prohibit foreigners from owning land outright.
Why this matters for Phuket property buyers
Nominee structures have been used for years in Phuket, often presented by agents or developers as legal workarounds. In practice, they are illegal. The Thai shareholder must be a genuine investor with independent funds and decision-making power. When the arrangement is fabricated purely to give a foreigner control, it breaches the law.
Previous enforcement has been sporadic. Crackdowns occur, cases are prosecuted, then the market returns to business as usual. This order, issued directly by the Deputy PM, suggests a more serious push, at least in the near term.
For buyers, the risk is not theoretical. Properties held through illegal nominee structures can be seized. The foreign buyer loses the property and the investment. The Thai nominees may face prosecution. The officials enabling the deals are now also under scrutiny.
What the law actually allows
Foreign nationals can legally own condominium units, provided that foreign ownership in the building does not exceed 49% of the total saleable area. This is the most straightforward path for foreign buyers in Thailand.
Land ownership is different. Foreigners cannot own land in their own name, with limited exceptions for certain investment schemes and treaties. A Thai spouse can own land, but the foreign spouse must sign a declaration that the funds used are the Thai spouse’s separate property. If the marriage ends, the land remains with the Thai spouse.
Company ownership is allowed, but the company must be a legitimate business with genuine Thai shareholders who contribute real capital and have actual control. A shell company with paid nominees is illegal. Authorities can and do investigate company structures, particularly when land is involved.
How enforcement works in practice
Enforcement is often triggered by disputes. A land dispute, a business disagreement, or a personal conflict can prompt an investigation into how the property is held. If the structure is found to be a nominee arrangement, the property is at risk.
In some cases, Thai shareholders in nominee arrangements have later claimed ownership, arguing they were the true owners all along. The foreign buyer has limited legal recourse because the structure itself is illegal.
The current investigation into officials suggests that enforcement may extend beyond individual cases. If officials are prosecuted for enabling nominee deals, the properties involved may also be examined. Buyers who used these structures, even years ago, could face renewed scrutiny.
What remains uncertain
The scope of the investigation is not yet clear. It is not known how many officials are under investigation, which land deals are being reviewed, or whether existing properties will be targeted.
The investigation also coincides with the case of a Phuket figure known as ‘Sia Lek,’ who was denied bail over witness tampering concerns related to land encroachment. The connection between that case and the broader investigation has not been detailed in available reports.
What is certain is that nominee structures remain illegal, and enforcement can occur at any time. Buyers relying on these arrangements are taking legal and financial risk.
What foreign buyers should understand
If you are considering Phuket property, the safest approach is to buy a condominium unit within the foreign quota. This is the clearest legal structure for foreign ownership in Thailand.
If you are considering land or a villa, the options are limited. You can lease land for up to 30 years, with potential renewals, though renewal is not guaranteed by law. You can use a Thai spouse’s name, but you must accept that the property is legally theirs. You can set up a company, but only if the company is a genuine business with real Thai partners who have independent investment and control.
If you are already holding property through a nominee structure, the risk has not disappeared. Legal advice is essential. Some buyers choose to restructure or sell. Others accept the risk. There is no simple fix.
For sellers, the investigation may create complications. Buyers are increasingly cautious about purchasing properties held through questionable structures. Due diligence is becoming more rigorous. Properties with clear, compliant ownership structures will be easier to sell.
Frequently Asked Questions
What is a nominee structure?
A nominee structure involves using Thai citizens as shareholders in a company to give a foreign buyer control of land, which is illegal under Thai law. The Thai shareholders are typically paid a small fee and have no real investment or decision-making power. Thai law requires shareholders to be genuine investors with independent funds and control.
Can the investigation affect properties bought years ago?
Yes. If a property is held through an illegal nominee structure, it can be challenged at any time. There is no statute of limitations on ownership disputes. The current investigation into officials may also lead to reviews of past land deals those officials enabled.
What is the safest way for a foreigner to own property in Phuket?
Buying a condominium unit within the foreign ownership quota is the clearest legal path. For land or villas, long-term leases or genuine company ownership with real Thai business partners are the compliant options, though both have limitations and require careful legal structuring.
What happens if my property is found to be held illegally?
The property can be seized by Thai authorities. The foreign buyer loses the investment. Thai nominees may face prosecution. Legal recourse is limited because the structure itself violates Thai law. Disputes often end with the loss of the property and funds.
Should I restructure my existing nominee arrangement?
If your property is held through a nominee structure, the legal risk is real. Consult a qualified Thai property lawyer with experience in ownership compliance. Some buyers restructure into long-term leases or sell. Others accept the risk. There is no risk-free solution once an illegal structure is in place.
Sources
- The Phuket News — Phuket Xtra: Video: Phuket officials under fire: PM orders corruption probe, suspect dead in police cell || May 15 — link
